Sales KPIs: How to Define the Right Metrics for Your B2B Sales Team

Identifying sales key performance indicators (KPIs) can feel like finding a diet that works: everyone claims their diet is the best, resulting in all manner of conflicting advice regarding ‘superfoods’ and other foods to banish entirely. It’s really quite confusing and frustrating since the ‘best’ is highly subjective both for food and KPIs. The real question is what’s right for you? What sales metrics will help you achieve your company goals?

KPIs are never one-size-fits-all.

So instead of trying to persuade you that certain KPIs are the best, I want to empower you to define the right metrics for your sales team. Then we’ll look at a list of the most common sales KPIs.

Defining the right KPIs

1. Start big. What are your company-wide goals? Revenue? Growth? Customer acquisition? Customer Retention? Typically, companies have one primary objective with one or two secondary goals that provide context and support the primary objective. Ideally, everyone in the company should know this off the top of their head. For example, the company goals might look like this:

Primary goal: Increase annual revenue to X amount

Secondary/supporting goal: Grow 6% month over month

2. Get specific. What sales objectives will help your company reach their overall goals? Take a broad goal such as total monthly sales and break it down further. What is your average deal size (or purchase value)? What is your average sales cycle length? What is your cost of sales? It’s important to view your primary goal (e.g. total monthly sales) in the context of your industry and specific business.

Sales Specific Goals

Primary sales goal: $ Monthly Sales

Secondary sales goal(s): % growth month over month

Contextual metrics

Average deal size ($)

Average sales cycle X days/weeks/months

Cost of sales ($)

Opportunity win rate (%)

3. Focus on action. Take the goals and contextual metrics you outlined in step 2 and distill what your team needs to do to reach those goals. Work backwards. How many deals do you need to close to hit your target? Based on that number, how many opportunities should be in your pipeline? How many calls/emails/meetings will be necessary? How many leads or contacts will your marketing team need to generate? Keep drilling down until you have a solid understanding of the key activities driving your revenue.

KPIs are most effective when they target specific actions for two reasons. One, action-oriented KPIs inspire action. And two, KPIs focused on action help uncover possible causes when the overall goal isn’t met.

Pipeline flow:

(#) of wins

(#) of deals/opportunities

(#) of sales qualified leads

(#) of marketing qualified leads

Actions required:

Send X outreach emails

Send X follow-ups

Make X calls

Conduct X meetings

Send X proposals

4. Prioritize your metrics. After completing the exercise in step 3, the most critical metrics should become obvious. I recommend compiling a short list of 5-8 sales KPIs that include both contextual metrics and activity-based metrics. This helps you focus on the most critical data without distorting their impact (this can easily happen if you only focus on 1-2 metrics). You can always adapt, add, or remove this list later.

Contextual example: Monthly Sales $ to date vs target monthly sales $

Activity example: X follow-ups vs (#) sales qualified leads

5. Monitor your metrics. This one is really a no-brainer, but it’s far too important to skip. Having the key metrics in front of your team on a daily basis will help them track progress and prioritize actions. Defining your KPIs will be a waste of time and energy if you archive them in a static document or spreadsheet. KPIs are living metrics meant to be shared and monitored regularly. Obviously, we believe a great way to do this is by getting them on a TV dashboard on your sales floor and you can see an example of what that dashboard might look like below.

Tracking your sales KPIs

Now that you’re equipped to define the right sales KPIs for your team, here are the most common sales metrics that are tracked.